Jury Convicts DeLay in Money-Laundering Trial

ENLARGE

Former House Majority Leader Tom DeLay inside the Travis County courthouse in Austin, Texas.
Associated Press

By

Ana Campoy

Updated Nov. 25, 2010 9:42 a.m. ET

AUSTIN, Texas—Former U.S. House Majority Leader Tom DeLay was convicted of money laundering in a state court here Wednesday, making it possible that the once-powerful political warrior could end his career behind bars.

Earlier:

The jury found Mr. DeLay knowingly funneled $190,000 in corporate donations to fellow Republicans running for the Texas legislature in 2002, violating state rules that ban companies from contributing to candidates' campaigns.

He was convicted on one count of money laundering, which carries a maximum prison sentence of 99 years, and one count of conspiracy to commit money laundering, which has a penalty of up to 20 years.

Prosecutors said they haven't yet decided whether to seek a prison term; sentencing is tentatively set for Dec. 20.

Aug. 2010: The Justice Department tells Mr. DeLay it is ending its probe into his ties to Mr. Abramoff.

Nov. 2010: Mr. DeLay goes on trial for money laundering in Austin.

Mr. DeLay, 63 years old, who once commanded the House with a hard-hitting style that earned him the nickname of "The Hammer," had been chatty and smiling for most of the trial.

But he listened to the verdict with a somber expression. Afterward, he hugged his wife and daughter, then put his hands on his hips and sighed.

"This is an abuse of power," Mr. DeLay told reporters outside the courtroom. "It's a miscarriage of justice and I still maintain that I am innocent."

His lawyer, Dick DeGuerin, said he would appeal the verdict, which the jury reached on its third day of deliberations.

The outcome will likely reverberate throughout the other 22 states with similar bans on corporate contributions, discouraging politicians from employing similar techniques and emboldening prosecutors to go after them using the same strategy, some legal experts say. The Travis County district attorney's office successfully argued that swapping corporate contributions for those made by individuals constitutes money laundering.

"It will put more people on notice that something which by one perspective might be considered as legal on the other can be characterized as money laundering," said Richard Briffault, a professor at Columbia University Law School.

But the campaign-finance landscape has also changed since Mr. DeLay's indictment in 2005, and companies now have other ways to influence elections. The Supreme Court ruled earlier this year that corporations have the same freedom-of-speech rights as individuals and are therefore allowed to spend their money on advertising or other efforts to support or oppose a candidate.

"For a lot of candidates there's not much of a difference in getting a big contribution or getting the money spent independently for support, so it does change the candidates' calculus," said Richard Hasen, a professor at Loyola Law School in Los Angeles.

The Republican Party has also changed a lot, both in Washington and in Texas, where Gov. Rick Perry has become the face of the party and is seen as a potential presidential candidate. Mr. Perry appeals to the anti-incumbent, outside-the-Beltway wing of the party, while Mr. DeLay, who represented a suburban Houston district, served 22 years in the U.S. House.

Mr. DeLay's trial started on Nov. 1, five years after the case against him was brought by a Democratic district attorney.

For three weeks, the prosecution alleged that Mr. DeLay skirted the state ban on direct corporate donations to candidates using a sort of shell game. Corporate donations to Mr. DeLay's political action committee were transferred to an arm of the Republican National Committee; the same amount of cash, raised by the RNC from individual donors, was then donated to the candidates.

Those campaign dollars were credited with helping more Republicans win seats in the state house; they used their power to redraw congressional districts that favored Republicans, prosecutors argued. A number of longtime Democrats subsequently lost their congressional seats, increasing Mr. DeLay's own power and prestige.

The defense said the transfer of funds was legal, and that the money the RNC ultimately gave to the candidates didn't come from corporations. Mr. DeLay didn't testify.

Mr. DeLay's influence within his party dimmed years ago, after he stepped down from Congress in 2006. Most of the public exposure he's gotten in recent years was as a contestant in "Dancing with the Stars."

"He's finished, there's no doubt about that," said Royal Masset, a Republican strategist and former political director of the Texas Republican Party. "It's not the verdict, he's just had his day in the sun."

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